Australian first: Firm introduces fixed-fee M&A

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The uncertain nature of M&A matters has meant that it has been viewed as too complex for fixed pricing models. But following a successful trial, one Australian law firm has begun to offer fixed-fee M&A arrangements to its clients.
 
According to Bespoke general manager Simon Kahil, it’s all in the planning. 
 
“Bespoke has invested in project management skills for its M&A team, to ensure that the scope of the M&A work is clearly defined and articulated before the fixed price is agreed.  We spend a lot of time and effort planning the M&A deal with our clients to provide them with a deal map – a structure and a process to guide the deal tasks that lie ahead,” he said.
 
The clients that participated in Bespoke’s fixed-price M&A trial last year incurred lower fees than they would have under a traditional time-based billing arrangement, Kahil said. The firm doesn’t charge for disbursements and the abort fee is just half the fixed price. 
 
Despite the added risk to the firm in this new approach, he believes the approach is worthwhile.
 
“There are a lot of factors in favour of fixed pricing.  The trust and confidence it gives clients in their legal team is eye-opening to clients who are used to traditional hourly rates and other forms of outdated processes,” Kahil said.
 
The move corresponds with firm’s ‘no timesheets’ approach to pricing. Kahil believes that Bespoke is the first Australian firm to offer a fixed-price M&A service and hopes that others will now follow suit.
 
“Providing a fixed fee model to clients for M&A services is already generating a great deal of market interest.  2015 is primed for a high volume of M&A activity,” he said.
 
  • Marcus McCarthy on 23/01/2015 3:40:27 PM

    I agree with you Kenneth - my point was not about Bespoke's M&A practice. It is that NewLaw is so much more than a story about fixed fees but unfortunately that is what is getting all the media focus. Fixed Fee in isolation definitely does not equate to NewLaw, which is about the structure of law practice itself. If as an industry we keep sending the message 'hourly rate bad, fixed fee good' there is a real risk of negative consequences for the profession as a whole, in my view. My business, Nexus Lawyers, like Bespoke is also largely based on fixed fees and retainers but I also am passionate about defending the reasonable, professional hourly rate that every single fixed engagement must amortise back to, or we both would not be in business for very long. Cheers

  • Kenneth Davies on 23/01/2015 3:18:25 PM

    By introducing an agreed fixed-price for M&A arrangements, clients now have a level of certainty that is absent under traditional time-based billing arrangements. The ‘NewLaw’ approach to implementing fixed-fees on M&A arrangements, rather than being a ‘race to the bottom’ enhances working relationships between lawyers and clients because it removes barriers. NewLaw is more than fixed fees, it is a new way of working.

  • Marcus McCarthy on 19/01/2015 12:59:40 PM

    Fixed Fees has been the norm in the M&A space for many years. I am concerned that equating 'NewLaw' with a focus on fixed fees is only going to end up in yet another example of lawyers engaging in a 'race to the bottom'...

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